Traders Union Research: Investors lose trust in exchanges as crypto portfolios grow
Crypto investors value exchanges for their convenience and quick access to trading, but they are not willing to trust them with just any amount. Traders Union research showed which risks most often push users to move their assets into personal wallets.
The study, “When to Move Crypto From an Exchange?,” found that 48% of participants keep most of their cryptocurrency on the exchange where they bought it, while another 12% use a different trading platform.
Personal wallets are used much less often. Hardware or cold wallets were chosen by 14% of respondents, while 13% use software wallets. Another 8% split their assets across several storage methods.
Where investors draw the line
Despite the popularity of exchanges, investors are reluctant to trust them with large amounts. A total of 54% of respondents either would not keep cryptocurrency on an exchange at all or consider an amount below $10,000 comfortable.
At the same time, 17% are willing to keep between $10,000 and $24,999 on an exchange, while another 12% are comfortable with $25,000 to $49,999. Only 13% would keep $50,000 or more this way, and 4% are willing to trust a reputable exchange with any amount.
Hacks push investors to move assets
Security problems were the main reason investors gave for moving cryptocurrency to a personal wallet. For 27%, a hack or another security incident would be the trigger, while 21% would move funds if withdrawals were delayed or suspended.
Another 16% cited financial problems at the platform or the threat of bankruptcy as the main reason. By comparison, the growth of the portfolio itself was the decisive factor for only 14% of participants. A regulatory warning or investigation would prompt 8% of respondents to change their storage method.
Convenience keeps crypto on exchanges
The main reason for leaving assets on trading platforms is ease of use, selected by 27% of respondents. Another 17% value the ability to sell cryptocurrency or trade quickly, while 16% simply trust large, well-known exchanges.
Moving to a personal wallet creates different risks. Investors are most concerned about losing a seed phrase or private key, cited by 25%. Another 18% fear sending cryptocurrency to the wrong address or choosing the wrong network, while 17% are worried about their own wallet being hacked.
Only 4% of participants said none of the listed self-custody risks concerned them. For 10%, losing or damaging the wallet device remains a separate concern, while 11% fear phishing or fake wallet applications.
Traders Union results show that the choice between an exchange and a personal wallet is not simply about finding a completely safe option. Exchanges attract users with convenience and quick access to trading, while self-custody offers more control but shifts responsibility for keys, transfers and account recovery to the owner.
Earlier, Traders Union analysts found that traders overestimate their understanding of leverage.
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